Wesbanco, Inc. · NASDAQ:WSBC
Wesbanco — Investor Presentation (February 2018)
33 slides from Wesbanco's investor presentation, Feb 6, 2018
Slide 1: Investor Presentation (Q1 2018)
Investor Presentation (Q1 2018) (WSBC financials as of Q4 2017) John Iannone Vice President, Investor Relations 304-905-7021
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-looking statements in this report relating to WesBanco’s plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The information cont
Slide 3: Key Differentiators
Key Differentiators Emerging Regional Diversified earnings stream built for long-term success Financial Services Robust legacy deposit base Institution Maintain a community bank at the core Strong market positions in diverse, major markets Diversified and Well-balanced loan and deposit dis
Slide 4: Balanced and Diversified
Balanced and Diversified Well-balanced loan and deposit distribution across diverse regional footprint Strong market positions across legacy and major metropolitan markets Diversified revenue generation engines supported by 100-year old trust business and proprietary mutual fund family Strong
Slide 5: Investment Rationale
Investment Rationale Well-balanced financial services company with a diversified earnings stream and a strong legacy of credit and risk management Disciplined growth, balanced by a fundamental focus on expense management, that delivers positive operating leverage Emphasis on customer service t
Slide 6: Growth and $10 Billion Asset Threshold Strategies
Growth and $10 Billion Asset Threshold Strategies
Slide 7: Long-Term Growth Strategies
Long-Term Growth Strategies Diversified Retail Loan Franchise- Long History Banking Portfolio Enhancing of Strong Service with C&I Expansion Wealth Strategies and Home within Management & Core Equity Contiguous Capabilities Deposit Lending Markets Advantage Focus Focus on Delivering Positive Operati
Slide 8: Diversified Loan Portfolio
Diversified Loan Portfolio Focus on strategic growth, $6.3 Billion Loan Portfolio diversification, and credit quality Comm'l & Expansion of Commercial and Industrial 18% Industrial (C&I), HELOC, and Comm'l R/E: Residential Mortgage portfolios Improved Consumer Property 6% Targeted reductions i
Slide 9: Strong Wealth Management Capabilities
Strong Wealth Management Capabilities Trust & Investments Insurance Trust Assets $3.9B of trust and mutual fund (Market Value as of 12/31) ($B) Personal, commercial, title, assets under management $3.9 health, and life $3.1 $3.2 CAGR 5,000+ relationships $2.3 ` 4% Expand title business in al
Slide 10: Franchise Expansion
Franchise Expansion Targeted acquisitions in existing Contiguous Markets Radius markets and new higher-growth metro areas Critical, long-term focus on shareholder return Strong capital and liquidity, along with strong regulatory compliance processes, provides ability to execute transactions qu
Slide 11: $10 Billion Asset Threshold Strategy
$10 Billion Asset Threshold Strategy Will cross the $10 billion asset threshold during the first half of 2018 upon the closing of the merger Approximately $9 million estimated, annual pre-tax income impact from reduced interchange income and additional FDIC expenses • 50% impact expected during
Slide 12: $10 Billion Asset Threshold Timeline
$10 Billion Asset Threshold Timeline Asset growth 19% Loan growth 30% $8.2B assets $8.6B assets $9.8B assets $9.8B assets $10+B assets $4.9B loans $5.1B loans $6.2B loans $6.3B loans 2015 2016 2017 2018+ DFAST Preliminary $10B Threshold Staffing FDIC $10B Preparations Complete Preparatory Developmen
Slide 13: $10 Billion Asset Threshold Milestones
$10 Billion Asset Threshold Milestones Milestone Project Complete Completion Date GAP Analysis Q1 2017 DFAST Staffing Q2 2017 Stress Testing Data Discovery and Planning Q2 2017 Modeling Software Installation Q2 2017 Consumer Product Review Q2 2017 Credit Model Development Q3 2017 Data Management Sof
Slide 14: Returning Value to Shareholders
Returning Value to Shareholders Focus on appropriate capital allocation to provide flexibility while continuing to enhance shareholder value Q4 2017 dividend payout ratio of 39.4% provides upside potential Q4 2017 dividend yield 2.5%, compared to 1.6% for bank group Quarterly Dividend per Shar
Slide 15: Financial Overview
WesBarco By all accounts, better. Financial Overview
Slide 16: Financial Performance Summary (Non-GAAP)
Financial Performance Summary (Non-GAAP) Three Months Ending Twelve Months Ending ($000s, except earnings per share) 12/31/2016 12/31/2017 Change 12/31/2016 12/31/2017 Change Net Income (1) $25,963 $28,972 11.6% $95,254 $107,876 13.3% Diluted Earnings per Share (1) $0.59 $0.66 11.9% $2.37 $2.45 3.4%
Slide 17: Financial and Operational Highlights – Q4 2017
Financial and Operational Highlights – Q4 2017 Net income up 11.6% and EPS up 11.9% to $0.66 (excluding certain costs) Return on tangible common equity of 14.4% (excluding certain costs) Executing upon well-defined, long-term operational and growth strategies in order to maintain a strong fina
Slide 18: Favorable Operating Metrics
Favorable Operating Metrics Disciplined execution upon growth strategies providing favorable performance versus peer group across key operating metrics Return on Average Tangible Equity Return on Average Assets 15.6% 1.13% 1.08% 1.07% 1.09% 14.6% 14.0% 13.9% 1.03% 1.06% 1.04% 1.07% 13.4% 13.1% 13.
Slide 19: Net Interest Margin (NIM)
Net Interest Margin (NIM) During 2017, NIM remained relatively consistent, reflecting increases in the Federal Reserve target federal funds rate and higher margin YCB net assets acquired but offset by higher funding costs and yield curve flattening Positioned for asset sensitivity in a rising in
Slide 20: Interest Rate Sensitivity
Interest Rate Sensitivity Positioned for asset sensitivity in a rising interest rate environment Change in Net Interest Income Immediate Change in from Base over One Year Interest Rates December 31, 2016 December 31, 2017 +1% Rate Shock +3.1% +2.4% +2% Rate Shock +4.6% +4.0% +3% Rate Shock +4.7% +
Slide 21: Risk Management and Regulatory Compliance
Risk Management and Regulatory Compliance Strong legacy of credit and risk management Based upon conservative underwriting standards Mature enterprise risk management program headed by Chief Risk Officer addressing key risks in all business lines and functional areas Reports to board-level R
Slide 22: Appendix
WesBarco By all accounts, better. Appendix
Slide 23: First Sentry Bancshares Transaction Highlights
First Sentry Bancshares Transaction Highlights Solidifies WesBanco’s position in the Huntington-Charleston corridor Very strong deposit market share in the Huntington-Ashland MSA Bridges the market gap between Charleston, West Virginia and Southeast Ohio Strong local leadership to remain in
Slide 24: First Sentry Bancshares Strategic Rationale
First Sentry Bancshares Strategic Rationale Strengthens WesBanco’s franchise by FTSB Pro-Forma Loan and bridging existing markets in Charleston, Deposit Contribution % of WSBC PF Loans(1): 6.7% West Virginia and Southeast Ohio % of WSBC PF Deposits: 6.9% Retention of experienced local management
Slide 25: Stock Performance: Long-Term Cumulative Return
Stock Performance: Long-Term Cumulative Return 600% 500% 400% 300% 200% 100% 0% (100%) WSBC S&P500 Note: cumulative return since WSBC IPO compared to the cumulative return for the S&P500 Index over the same time period 24
Slide 26: Experienced and Stable Management Team
Experienced and Stable Management Team Years in Years at Executive Position Banking WSBC James Gardill Chairman of the Board 45* 45 Todd Clossin President & Chief Executive Officer 34 5 Robert Young EVP – Chief Financial Officer 32 17 Lynn Asensio EVP – Retail Administration 40 13 Ivan Burdine EVP –
Slide 27: Financial Performance Summary Trend – Annual
Financial Performance Summary Trend – Annual Net Income (1) ($MM) Efficiency Ratio (1) $107.9 60.99% 59.59% $95.3 57.05% 56.69% 56.44% $88.0 $70.8 $64.8 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Return on Average Assets (1) Return on Average Tangible Equity (1) 1.13% 1.08% 1.09% 1.06% 1.07%
Slide 28: Diligent Focus on Credit Quality – Annual Trend
Diligent Focus on Credit Quality – Annual Trend Loan loss allowance decline due to improvement in credit quality Net Charge-Offs as % of Average Loans Legacy Loan Loss Allowance and Total Loans 0.38% Legacy Loan Loss Allow ance ($000s) $46,786 $44,154 $41,709 $41,108 $42,218 0.23% 0.23% 2013 2014
Slide 29: Reconciliation: Efficiency Ratio
Reconciliation: Efficiency Ratio Three Months Ending Twelve Months Ending ($000s) 12/31/2016 12/31/2017 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 Non-Interest Expense $58,298 $54,837 $160,998 $161,633 $193,923 $208,680 $220,860 Restructuring & Merger-Related ($2,684) ($454) ($1,310) ($1
Slide 30: Reconciliation: Net Income and EPS (Diluted)
Reconciliation: Net Income and EPS (Diluted) Three Months Ending Twelve Months Ending ($000s, except earnings per share) 12/31/2016 12/31/2017 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 Net Income $24,218 $15,897 $63,925 $69,974 $80,762 $86,635 $94,482 Net Deferred Tax Asset Revaluation
Slide 31: Reconciliation: Return on Average Assets
Reconciliation: Return on Average Assets Three Months Ending Twelve Months Ending ($000s) 12/31/2016 12/31/2017 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 Net Income (1) $96,344 $63,068 $63,925 $69,974 $80,762 $86,635 $94,482 Net Deferred Tax Asset Revaluation (1) $0 $50,703 $0 $0 $0 $0
Slide 32: Reconciliation: Return on Average Tangible Equity
Reconciliation: Return on Average Tangible Equity Three Months Ending Twelve Months Ending ($000s) 12/31/2016 12/31/2017 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 Net Income (1) $96,344 $63,068 $63,925 $69,974 $80,762 $86,635 $94,482 Amortization of Intangibles (1) $3,451 $3,104 $1,487
Slide 33: Reconciliation: Legacy Loan Loss Allowance and Total Loans
Reconciliation: Legacy Loan Loss Allowance and Total Loans Twelve Months Ending ($000s) 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 Loan Loss Allowance $47,368 $44,654 $41,710 $43,674 $45,284 Allowance on Acquired Loans ($582) ($500) ($1) ($2,566) ($3,066) Legacy Loan Loss Allowance $46,7